John Deere's Weak Q2 Results Drag Down Agribusiness ETFs
Zacks Investment Research | May 19, 2019 10:15PM ET
Before the opening bell on Friday May 17, the world’s largest agricultural equipment maker, Deere & Co (NYSE:DE) , reported disappointing second-quarter fiscal 2019 results. The company’s earnings lagged estimates for the fifth straight quarter, forcing it to cut its fiscal 2019 outlook, which reflects the escalated tension in the U.S.-China trade war. This is especially true as farmers, particularly, have been caught in the crossfire of trade and commodities, such as soybeans, which were the worst hit. However, the company’s revenues exceeded the consensus mark.
Earnings per share came in at $3.52, well below the Zacks Consensus Estimate of $3.58 but improved 12% from the year-ago period. Moreover, revenues grew 5.8% year over year to $10.27 billion and edged past the Zacks Consensus Estimate of $10.15 billion.
For fiscal 2019, the farm equipment giant slashed its total sales guidance from 7% to 5% while net income view to $3.3 billion from $3.6 billion. However, the company expects equipment sales to increase 5% year over year but agricultural exports to persistently suffer. Softening conditions in the agricultural sector emanated from the US-China trade war and a delayed planting season across much of North America have made farmers cautious about their new equipment purchases and prompted John Deere to trim its projection (read: Original post
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